Dynamic Engineers, Kota V. ASSISTANT COMMISSIONERS OF INCOME TAX, CIRCLE-1, KOTA

ITA 870/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9968 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 14-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA JCIT DHK
• Assessee Lawyers: D KUMAR
• Keywords: TDS
• Section: 271(1)(c); 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES B, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA -@ ITA NO. 870/JP/2019 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2009-10 DYNAMIC ENGINEERS, E-20, INDUSTRIAL AREA, OPPOSITE TO MULTIMETALS KOTA, RAJ. C UKE VS. A.C.I.T., CIRCLE-1, KOTA. LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AAAFD 9332 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI D. KUMAR (ADV) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K.C. GUPTA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/01/2020 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 03/01/2020 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A), KOTA DATED 15/03/2019 FOR THE A.Y. 2009-10 IN THE MATTER OF IMPOSITION OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT) AMOUNTING TO RS.13,745/-. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND ENGAGED IN THE BUSINESS OF MANUFACTURING OF SLEEPER AND SUPPLYING THEM TO THE RAILWAY. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE A.O. FOUND THAT THE ITA 870/JP/2019_ DYNAMIC ENGINEERS VS ACIT 2 ASSESSEE HAS MADE PAYMENT OF SALES TAX WHICH WAS CLAIMED AS AN EXPENDITURE. ON FURNISHING OF DETAILS OF SUCH SALES TAX DEMAND, THE A.O. FOUND THAT THE SOME OF THE DEMAND RELATE TO THE EARLIER YEAR BUT WAS CLAIMED IN THIS YEAR AND SOME SALES TAX PAID WAS IN THE NATURE OF PENALTY PAID AT THE CHECK POST. ACCORDINGLY, THE A.O. MADE DISALLOWANCE OF RS. 44,481/- WHILE FRAMING ASSESSMENT U/S 143(3) OF THE ACT. IN RESPECT OF DISALLOWANCE SO MADE, THE A.O. ALSO LEVIED PENALTY U/S 271(1)(C) OF THE ACT BY OBSERVING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE A.O., AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT THE PENALTY HAS BEEN IMPOSED FOR CLAIMING PAYMENT OF SALES TAX OF RS. 44,481/- TREATING THE SAME AS NOT PERTAINING TO THE YEAR UNDER CONSIDERATION AND THAT IN THE NATURE OF PENALTY UNDER SALES TAX ACT. THE DETAILS OF SALES TAX CLAIMED AS EXPENSES ARE AS UNDER: DATE PARTICULARS AMOUNT 20/05/2008 SALES TAX DEMAND DEPOSITED FOR YEAR 2001-02 RS. 5,425/- 20/05/2008 SALES TAX DEMAND DEPOSITED YEAR 2002-03 RS. 271/- 20/05/2008 SALES TAX DEMAND DEPOSITED YEAR 2003-04 RS. 180/- 16/06/2008 SALES TAX CHECK POST PENALTY RS. 32,500/- 30/10/2008 STDS (05-06 RS. 2,659/- ITA 870/JP/2019_ DYNAMIC ENGINEERS VS ACIT 3 REFUND ORDER NO. 871/44 OF SALES TAX 31/03/2009 CST REFUNDABLE 2001-02 RS. 3,626/- 4. THE AO DISALLOWED CLAIM OF DEDUCTION IN RESPECT OF SALES TAX DEMAND ON THE PLEA THAT THE PART OF SUCH DEMAND WAS RELATING TO THE EARLIER YEARS WHEREAS PART OF THE DEMAND WAS RELATING TO THE SALES TAX CHECK POST PENALTY, ACCORDINGLY THE SAME WAS NOT ALLOWABLE UNDER THE ACT. THERE IS NO DISPUTE TO THE WELL SETTLED LEGAL PROPOSITION THAT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE. MERELY BECAUSE THE CLAIM OF DEDUCTION OF EXPENSES BY THE ASSESSEE IS NOT FOUND ACCEPTABLE, LEVY OF PENALTY PER SE IS NOT AUTOMATIC. IN THIS CASE, THE BONAFIDE OF SALES TAX PAYMENT WAS NOT DOUBTED MERELY BECAUSE IT WAS EITHER NOT PERTAINING TO THE YEAR UNDER CONSIDERATION OR BECAUSE IT WAS IN THE NATURE OF CHECK POST PENALTY, THE SAME WAS NOT ALLOWED AS DEDUCTION. HOWEVER, WE FOUND THAT THE COMPLETE DETAILS WERE FURNISHED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) HAVE HELD THAT DECLINE OF CLAIM OF EXPENDITURE IS NOT SUFFICIENT TO IMPOSE PENALTY U/S 271(1)(C) OF THE ACT. THE HONBLE SUPREME COURT HAVE ALSO HELD THAT A GLANCE OF PROVISION OF SECTION 271(1)(C ) WOULD SUGGEST THAT IN ORDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE INSTANT CASE WAS NOT THE CASE OF ITA 870/JP/2019_ DYNAMIC ENGINEERS VS ACIT 4 CONCEALMENT OF THE INCOME. THAT WAS NOT THE CASE OF THE REVENUE EITHER. IT WAS AN ADMITTED POSITION IN THE INSTANT CASE THAT NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT WAS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, PRIMA FACIE, THE ASSESSEE COULD NOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. THE REVENUE ARGUED THAT SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME. SUCH CANNOT BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS. THEREFORE, IT MUST BE SHOWN THAT THE CONDITIONS UNDER SECTION 271(1)(C) EXIST BEFORE THE PENALTY IS IMPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED, BECAUSE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. 5. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE VIS A VIS DISCLOSURE GIVEN BY THE ASSESSEE IN THE RETURN OF INCOME AS WELL AS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WE DO NOT FIND ANY MERIT IN THE ITA 870/JP/2019_ DYNAMIC ENGINEERS VS ACIT 5 ACTION OF THE A.O. FOR IMPOSING PENALTY IN RESPECT OF PART DECLINE OF ASSESSEES CLAIM OF DEDUCTION IN RESPECT OF SALES TAX PAYMENT. ACCORDINGLY, WE DIRECT THE A.O. TO DELETE THE PENALTY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD JANUARY, 2020. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKA D@ DATED:- 03 RD JANUARY, 2020 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- DYNAMIC ENGINEERS,KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE A.C.I.T., CIRCLE-1, KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 870/JP/2019) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR